(Bloomberg) -- China Premier Li Keqiang’s aim to eliminate import taxes on cancer drugs and significantly lower those for other medicines may provide a boon for global drug makers looking to the world’s second-biggest pharmaceutical market for growth.
“For hot-selling consumer products in the market, including medicine, especially anti-cancer drugs urgently needed by the people, we will lower import tariffs to a relatively large extent, and work hard to reach zero tariff for anti-cancer drugs,” Li said Tuesday at a press conference at the close of the annual National People’s Congress in Beijing.
The initiative on drug tariffs was part of a broader pledge by Li to further open the economy, including the manufacturing sector. The message comes as Chinese leaders prepare for further deterioration in trade relations with Donald Trump’s White House. The U.S. plans to impose tariffs worth as much as $60 billion on Chinese products as early as this week, Bloomberg has reported.
A further easing of taxes on medicines should benefit companies from New York-based Pfizer Inc. to the U.K.’s GlaxoSmithKline Plc, as well as Chinese drug makers. Pharmaceutical companies climbed in Hong Kong after Li spoke. The MSCI China health-care index touched the highest level since 2005, led by a 15 percent gain by CSPC Pharmaceutical Group Ltd.
The move continues efforts to follow President Xi Jinping’s call to meet citizens’ demands for improved living standards and better quality products in the world’s largest consumer market. In November, China announced import tax reductions for a range of medicines, including various antibiotics and insulin products, to 2 percent from as much as 6 percent.
China’s medical imports stood at $28.7 billion in 2017, according to the General Administration of Customs. The country’s pharmaceutical market is second only to the U.S. in size, and its medical expenditure is expected to grow as much as 8 percent a year to $170 billion in 2021, according to researcher QuintilesIMS.
"There’s no doubt that this measure by the State Council will further lower the economic burden of Chinese cancer patients, and help increase their access to innovative drugs," said Kang Wei, managing director of R&D-Based Pharmaceutical Association Committee, an industry group representing foreign drug companies in China.
©2018 Bloomberg L.P.
With assistance from Li Hui